Arcelormittal said on Thursday it would pull out of buying Ilva, the troubled Italian company that owns Taranto steel, after the Italian parliament withdrew its exemption from polluting Taranto steel in southern Italy. Taranto has previously been embroiled in a controversy over pollution, which experts believe has caused significant damage to the surrounding environment.

Arcelormittal began planning to buy the steel plant in November and plans to invest 2.4 billion euros (about $2.7 billion) to restore operations, including 1.2 billion euros to clean up pollution (by 2024). As a result, arcelormittal has been granted a certain exemption from pollution to allow the steel mill to make a gradual transition to environmental standards.

The decision was eventually reversed by the Italian parliament, and arcelormittal lost its exemption from pollution on November 3rd. Arcelormittal later said it would walk away from the deal altogether, saying it was a contractual right because its ability to operate was "severely impaired".

Arcelormittal's decision has come under fire across Italy, saying it will cost thousands of jobs. Taranto is the largest integrated steel plant in Europe, employing more than 8,000 people in the southern Italian city.

Arcelormittal had temporarily cut 1,400 jobs in June because of weak markets, as steel tariffs dampened demand across Europe. (From Csteel)